Filenews 18 July 2023 - by Bobby Ghosh
The most pointless conflict in the Middle East – and this is a title for which many local disputes compete with each other – is finally over.
After a 10-year freeze on diplomatic relations, Turkey and Egypt are finally exchanging ambassadors again. Having led their countries through a decade of political repression and economic pain, Turkey's President Recep Tayyip Erdogan and Egyptian leader General Abdel Fattah el-Sisi hope that resuming normal relations between them will pay dividends.
Opportunities that do not go back
These, however, are unlikely to make up for the cost of the missed opportunities of years that the two men missed in their mutual competition. At the same time, Erdogan and Sisi turned their countries into the proverbial "sick men" of the Middle East, to the extent that each is now in desperate need of an economic crutch.
It may seem that Erdogan walked away with his head held high as a winner from last week's NATO summit, where he used Turkey's veto power to extract some concessions from Sweden and win praise—and possibly a fleet of F-16s—from U.S. President Joe Biden.
Sisi, too, has enjoyed Biden's goodwill toward him, despite the Egyptian regime's appalling human rights record. However, both men face huge economic problems at home, and the resumption of ties between their countries is a stark reminder of the opportunities they missed.
Under other circumstances and other leaders, Turkey and Egypt may have forged a key partnership: the former boasting of the region's most diverse and sophisticated economy, and the latter of the largest market and most populous workforce. That, in any case, was the hope in 2012, when Erdogan agreed to grant Egypt, led by then-President Mohamed Morsi, a $1 billion loan — the first, as many hoped, of a series of loans that would follow. When they met in Ankara that fall, there was much talk of shared economic interests and the promise of an upgraded free trade agreement. Zafer Caglayan, then Turkey's economy minister, pledged that bilateral trade would double to $10 billion in no time.
But within months, Sisi had overthrown Morsi in a coup. Erdogan, whose Justice and Development Party (AKP) shared the ideology of Morsi's Muslim Brotherhood, denounced the general as an "illegitimate tyrant." Sisi, who viewed the Brotherhood as an existential threat, resented Erdogan, who gave refuge to the group's leaders and other Egyptian opposition figures. Cairo declared the Turkish ambassador persona non grata, and Ankara responded in the same way.
Over the next decade, the two leaders found themselves in opposing camps in many of the region's conflicts. In 2017, Egypt joined Saudi Arabia, the United Arab Emirates and Bahrain in severing diplomatic relations with Qatar, Turkey's closest ally in the Gulf region. In early 2020, Erdogan sent Turkish troops to Libya to support the government in Tripoli, which was threatened by rebel General Khalifa Haftar, with Egyptian support. Later that year, Egypt joined Cyprus, Greece, Israel, Italy, Jordan and the Palestinian Authority to create the EastMed Gas Forum, emphatically excluding Turkey.
Trade between the two countries has grown over the past decade, but much slower than they had envisioned when Erdogan and Morsi posed for photos in Ankara. A surge in Egyptian gas imports from Turkey last year, after relations had begun to improve, helped push bilateral trade to $7.76 billion.
But while Turkish-Egyptian cooperation could challenge the Gulf Arab oil states as the dominant economic and political core of the Middle East and North Africa, today both countries rely heavily on sheikhs. Having tormented Turkey's economy with eccentric monetary policies, Erdogan was forced to bend to the Gulf states and seek help from the UAE, Saudi Arabia and Qatar. To these countries he will return soon, with a big hat in hand asking for funds.
From Cairo, Sisi will watch with envy after having already drained credit lines of easing from petro-states in a futile attempt to plug the widening cracks in an economy where out-of-control inflation is destroying households as the government grapples with a shortage of foreign currency. Egypt was forced to seek credit lines from China and India, on less generous terms than it once received from the Gulf.
The bloc that was never formed
Turkey and Egypt seek to attract investors more from the Gulf states than from each other. This week, Emirati companies took advantage of some opportunities to buy Egyptian state assets. Erdogan and Morsi had envisioned companies from their countries doing business across the global south, but there were few joint ventures of scale. Turkey's construction companies mostly missed the opportunity to build the new administrative capital that Sisi is creating outside Cairo. Egypt's military-industrial complex has not benefited from the innovation of Turkey's defense industry.
Other opportunities may arise even so, as relations between the two countries continue to improve. There is obviously great potential for cooperation in the exploitation of hydrocarbons in the Eastern Mediterranean, especially if Sisi can help resolve disputes between Turkey and other littoral states. It is understood that Turkish companies could bid for Egyptian military-owned companies that Sisi has pledged to sell.
The promise, however, of a strong Turkish-Egyptian partnership now seems lost. Ankara and Cairo could together balance the influence of petrocrats in the Arab world. They could have attracted other regional players – Iraq and Libya immediately come to mind – into an economic bloc. They could have helped each other become more competitive with the major world powers in Africa. Indeed, they could have been bigger players in the geopolitics of the global south.
Alas, it will be a long time before the two countries make up for the 10 years lost to the bellicose mood of their leaders.
